Accounting: Prohibition of LIFO method under IFRS IFRS regulations are based on accounting principles rather than guidelines. LIFO method of inventory valuation is prohibited because it brings distortions on entities’ profitability and financial reports. Under LIFO method it profit margin. On the balance sheet effects FIFO will report a high value in the current assets which means a high current ratio. Any change from FIFO to the weighted average method would result to cost flow assumption. [...]
"The last-in-first-out (LIFO) costing methodology for inventory is prohibited under IFRS. The change to IFRS would force a company to adopt the first-in-first-out (FIFO) methodology or weighted average cost method. The adoption of a new costing method could significantly impact the operating results of an entity." LIFO DB.pdf What are your thoughts on this?